Keyword Analysis & Research: manufacturing inventory gaap

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Frequently Asked Questions

Does GAAP require a physical inventory why?

GAAP requires amounts shown in financial statements to reflect the historical cost of assets. Merchandise inventory, which is a current asset, is normally valued at cost. When inventory shrinkage is not reflected due to an absence of physical inventory count, total ending inventory cost becomes overstated.

Is the moving average inventory method GAAP?

The GAAP accepts FIFO, LIFO, and the moving average cost inventory valuation methods. However, IFRS doesn't accept the LIFO method. This means if your business is based anywhere other than the US, you can't use the LIFO valuation method. Also take note that GAAP and IFRS have different standards when it comes to the way your inventory is recorded.

Is weighted average inventory valuation GAAP?

The weighted average cost method divides the cost of goods available for sale by the number of units available for sale . The WAC method is permitted under both GAAP and IFRS

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